Mike, amazing progress!
Let me know how the collet closer rebuild goes. I have an older style vari-grip that is leaking air also. The rotary union on mine does not have seals. There are o-rings in the air cylinder but not in the union. The union has a bronze bushing. In my case a worn bronze bushing. Air will leak between the in and out port before it makes it to the cylinder.
I'm hoping to repair mine. Let me know what you find in yours!